As World Bank blacklists SMEC for Fraud…

The Millennium Challenge Corporation (MCC) has sanctioned a suspension of a whooping electricity contract between the MCC Unit in Sierra Leone and SMEC.

SMEC is an Australian-based company that provides engineering services throughout the world. Among its many clients is the MCC, who in March this year awarded a US$671,000 contract to SMEC for consultancy services for the assessment and business planning activities of the Electricity Generation and Transmission Company in Sierra Leone.

According to Devex news, the Australian-based company, which is one of the world’s largest engineering services for aid and development projects, and four of its subsidiaries, have been debarred by the World Bank for 108 months collectively for bribery and misrepresentation in its South Asia projects.

The announcement was reportedly made last Thursday, with the World Bank revealing that the five SMEC subsidiaries made inappropriate payments in relation to World Bank-financed projects in Sri Lanka and Bangladesh, as well as misrepresentations to meet bidding requirements under World Bank-financed projects in Sri Lanka and India.

It is not immediately known if SMEC employed a similar move to secure its lucrative contract here in Sierra Leone with the MCCU with regards consultancy services offered to the Electricity Generation and Transmission Company.

When Concord Times contacted officials at the MCC Unit office in Freetown, a certain William Freeman, who identified himself as Information Officer, was circumspect to speak about the issue. He instead provided the contact of one Laura Allen, Press Secretary in the Office of Congressional and Public Affairs/Millennium Challenge Corporation, whom he said would be in a better position to answer our inquiry.

In an email correspondence, Concord Times requested Ms. Allen to confirm whether the US government and by extension MCC is investigating the contract between SMEC and the MCC Unit in Freetown in respect of activities relating to the Electricity Generation and Transmission Company.

Ms. Allen replied that, “MCC takes allegations of and proven examples of fraud or corruption extremely seriously. MCC is reviewing the situation with its partners at the Millennium Challenge Coordinating Unit in Sierra Leone. MCC has informed MCCU that payments to the firm under the current contract are to be temporarily suspended while MCC reviews the situation. MCC is also informing all Millennium Challenge Accounts and their respective Procurement Agents of the debarment, and that no new contracts are to be signed with the firm for the duration of the debarment.”

She added that the “MCC is contacting its colleagues in the World Bank to seek further details. MCC is also contacting SMEC directly to obtain their explanation of the situation. Based on this information, MCC decides whether the current contract should continue. If MCC or its partner organizations believe there may have been fraud or corruption under the current contract, MCC will inform USAID’s Office of the Inspector General’s Office of Investigation (OIG/I) for possible investigation.”

Although no evidence exist as yet that SMEC may have bagged the lucrative contract in Sierra Leone as a result of improper means, the direct and immediate fallout from World Bank blacklist has seen the MCC move swiftly to halt all payments to SMEC.

“SMEC will be debarred from MCC funded procurements for the duration of its debarment by the World Bank. Paragraph P1.A.1.7 of MCC’s Program Procurement Guidelines states: ‘To foster competition, MCC permits firms and individuals to offer goods, works, and non-consultant services for MCC-funded Projects, except firms and individuals that (i) are declared ineligible by The World Bank for any reason during the period of time that the firm or individual is sanctioned by The World Bank; (ii) are blacklisted by The World Bank; or (iii) are debarred or suspended from participation in procurements funded by the United States Federal Government or otherwise prohibited by applicable United States law or executive order or United States policies, including under any then-existing anti-terrorist policies.”

Meanwhile, the email from Ms. Allen noted that “Implementation of MCC compacts include the establishment by the recipient government of an “Accountable Entity” that takes on the responsibility for hiring and managing contractors and consultants during the implementation of the project; they are usually called Millennium Challenge Accounts (MCAs). In Sierra Leone, the “Accountable Entity” is the Millennium Challenge Coordinating Unit (MCCU).